India-focused funds are seeing renewed selling pressure as global liquidity continues to migrate toward China, precious metals, and commodities, according to the latest Global Liquidity Tracker from Elara Securities.
Redemptions from India-dedicated funds surged to a two-month high of $382 million this week, sharply up from $197 million last week and $72 million the week before. Since July 2025, total outflows have reached $2.9 billion, erasing nearly all the $2.8 billion inflows seen between April and July following the post-tariff rebound.
According to the report, all redemptions over the past six weeks have come from long-only funds, while ETF flows have remained flat. Japan-domiciled retail funds have turned into major sellers of Indian equities, followed by Luxembourg-based funds, while Ireland-based funds have seen limited impact so far.
Even as India faces outflows, China remains the preferred destination for global investors, continuing to command a larger share of allocations. Global Emerging Market (GEM) funds have recorded $9 billion of inflows in the past two months, with most of the support coming from global ex-US strategies.
Investor preference has also pivoted toward commodities and precious metals. Commodity sector funds extended their winning streak to 15 consecutive weeks, attracting $16.8 billion in net inflows since July — the strongest recovery since 2020.
Elara said this surge indicates “signs of a structural breakout” in the global commodity cycle. The Global Metals & Mining Index has crossed its 2008 highs — a key resistance level breached for the first time since 2022 — suggesting further upside in the sector.
At the same time, precious metal funds continued their extraordinary run, recording $11 billion of inflows this week alone which is nearly double the previous week. Over the past two months, these funds have absorbed a record $80 billion, the strongest inflow phase in EPFR history.
US equity flows steady, high-yield debt shows strain
Despite the global rotation, US equity flows remain robust, with foreign investors adding $33 billion and domestic funds another $17 billion in the past four weeks. However, Elara observed that long-term momentum has been moderating since the Trump tariff announcement in April 2025.
On the other hand, global high-yield bond funds saw $4.7 billion of outflows, the steepest since “Tariff Week” in April, reflecting growing investor caution toward riskier credit assets.
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